Tuesday, October 1, 2013

The Proposed 2013-2014 Budget: More for the President, Less for the People

by Francklyn B. Geffrard and Kim Ives

President Michel Martelly and Prime Minister Laurent Lamothe have presented to the Haitian Parliament for ratification their budget for the 2013/2014 fiscal year, but it has provoked criticism and outrage from economists, politicians, parliamentarians, and civil society. Many consider the budget scandalous. Sen. Steven Benoit of the West Department called it a "criminal budget." Speaking Aug. 23 on a Port-au-Prince radio station, Benoit said that the budget, if adopted as presented by the Executive, would penalize Haiti’s poorest. "This is a budget that aims to protect the strong over the weak, those who have few ways to survive," he said, vowing that he would never vote for it. The Chamber of Deputies, where the Executive maintains a majority of votes through bribery, passed the budget without any modifications after one reading. However, the Senate must agree to the exact same version of the budget before it can be ratified. Some ministries saw their budgets increased, while others were severely cut. For example, the Ministry of Economy and Finance’s proposed budget was more than doubled from last year’s 41 million gourdes (US$935,000) to 90 million gourdes (US$2 million). The Ministries of Justice and Public Safety as well as Interior and Local Communities also would get more money, while the Ministries of Agriculture, Education, Public Health, and Social Affairs would be slashed. Meanwhile, the proposed operating budget for the President has more than tripled in the last two years. In 2011 when President Martelly came to power, the budget for the Presidency was 95 million gourdes (US$2.2 million). This amount was increased to 165 million gourdes (US$3.8 million) in Fiscal Year 2012/2013, and for this fiscal year, the Presidency wants a budget of 329 million gourdes (US$7.5 million). There is no conceivable justification for this increase in a country facing a serious economic crisis. To make matters worse, for years the Haitian government has relied on international donors for budget support, usually to the tune of 60 to 70%. But this year the international community has reduced its budget support by 30%. To compensate, the Haitian government is proposing higher taxes and fees on a host of goods and services. The budget reflects the government’s priorities. Out of its total 126.4 billion gourdes (US$2.9 billion), 46.26 billion gourdes (US$1 billion) are earmarked for operations, 77.48 billion gourdes (US$1.8 billion) for capital and social investments, and 2.65 billion gourdes (US$60.4 million) for servicing Haiti’s debt, which Martelly and Lamothe have run up from zero to historic highs (over $1.1 billion) while in office. In short, the government’s operating budget and debt servicing are being significantly increased, while investment in vital economic sectors is being reduced.

For example, the Agriculture Ministry last year received 9.9 billion gourdes (US$226.4 million), but this coming year would get only 7.2 billion gourdes (US$164.7 million). However, in his 2013 New Year speech, Martelly promised to make Haiti self-sufficient in food in the remaining three years of his five year term. In reality, the country continues to import almost everything that Haitians consume while domestic production is falling. The government has even begun importing rice from Vietnam, while shunning support to Haitian farmers, as the proposed budget shows. Martelly also declared 2013 the “Year of the Environment,” saying it was a priority in his five “E” program (Environment, Employment, Education, Energy, and Etat de Droit or State of Law). Yet he allocates only 1.86 billion gourdes (US$42.4 million), or 1.5% of the total budget, for the environment for 2013/2014. Education is also a priority, according to the government’s slogan. However, the supposedly crucial Education Ministry would receive an envelope of only 16.1 billion gourdes (US$36.7 million), a mere 12.8% of the budget, down from 19.3 billion gourdes (US$44 million) last year. If education was truly a priority, there would be a fixed date for the start of classes. But like the past two years, the Martelly/Lamothe government has delayed the traditional September start of the school year until October. Meanwhile, the government has managed to hold multiple carnivals on time each year. The Public Works Ministry would get 26.3 billion gourdes (US$60 million) , or 21% of the overall budget. While Haiti’s deplorable infrastructure is certainly in need of improvement and repair, does it warrant almost double what is being spent on education? Is paving roads really more important than educating Haiti’s children? The 2013/2014 budget also raises many taxes and fees on the Haitian people, both in Haiti and in its diaspora. For example, 10 years ago, a passport cost 750 gourdes (US$17) and 1,000 gourdes (US$23) in a rush. Today, under the new proposed budget, a 10-year passport would cost 10,000 gourdes (US$228). Meanwhile, the fees for drivers licenses, government seals, selling animals, and buying used cars and car parts may be doubled or sometimes tripled in the new budget. Property taxes, generally unheard of in Haiti, are now being levied by tax collectors on outraged peasants. Getting a government seal on a marriage or divorce certificate used to cost one gourde but now would cost 1,000 gourdes (US$23) or 1,500 gourdes (US$34) respectively. A peasant who sells a goat would have to pay 150 gourdes (US$3.40). Selling an ox would incur a tax of 500 gourdes (US$11.40). The average income of a Haitian peasant is about $2 a day. This is a form of extortion on Haiti’s poorest and weakest. Government officials defend such fee hikes and spending cuts by saying they are implementing an austerity policy. But in that case, they should be slashing Martelly’s obscenely bloated and corrupt bureaucracy. For example, the 2013/2014 budget provides a monthly salary of 250,000 gourdes (US$5,700) to First Lady Sophia Saint-Rémy Martelly and 200,000 gourdes (US$4,560) for Martelly’s son, Olivier. Both make more than a minister’s monthly salary of 121,000 gourdes (US$2,760). The salary of a university professor, who forms the future managers for Haiti’s public service, is far from reaching the 50,000 gourdes (US$1,140). Take the case of Professor Herold Toussaint, who teaches at the State University of Haiti (UEH). His monthly salary is a mere 38,000 gourdes (US$867), and this for a man who has a Ph.D. in two disciplines and is the author of several books (Le Nouvelliste, 23 August 2013). According to Haitian economist Eddie Labossière, who spoke on Radio-TV-Timoun on Aug. 27 as a guest of the day, the proposed budget should be sent back to the Executive to be revised by eliminating too high taxes and fees, balancing the investment and operating budgets, and promoting national production. He proposed the elimination or merger of some ministries to free up money to invest in Haiti’s productive sectors. For Labossière, the proposed budget failed to meet three key criteria: “transparency, participation, and accountability.” It is easy to understand why, according to the World Bank, 82% of trained Haitians currently living abroad. Incompetence is substituted for competence. Those who work usually do not receive the salary they deserve, while sinecurists get huge salaries. There is no provision in the 2013/2014 “austerity” budget for improving the working conditions or lives of teachers. The proposed budge would further decapitalize Haiti’s already almost destroyed middle class, deepen poverty in the rural and urban masses, but enrich Martelly and his corrupt cronies. Passage of this proposed budget would likely lead to riots breaking out across the country.